Second Order Thinking

As we are crafting strong and robust manufacturing processes, we have to make many plans and projections, based on our current reality.

Mental models, or frameworks, can help us as we do this thinking. They provide a structure to our thinking, so we can streamline our thinking and not have to “reinvent the wheel”.

We normally consider the results of our actions; these immediate effects are also called the first-order consequences of our actions.

However, we much less frequently consider the effects of the effects. This is also called second-order thinking, and it is a very useful mental model to keep in your bag of tricks.

We need to carefully consider the second order effects upfront. Many times this is not done until it is too late.

Not considering the second order effects until it is too late is also called the “Law of Unintended Consequences”.

Let’s think about this from the Process Perspective for a bit.

Suppose we know there are opportunities to significantly improve the yields in a current manufacturing process, but despite our knowledge, we don’t take action to improve the situation.

The immediate effect is that we have resources to work on other activities and do not have to start a focused yield improvement project. This means we can focus on what is on our plate now, which makes things easier in the short-term.

However what are the second-order effects of the decision not to improve yields? If yields are not improved, more space is left open for competitors to move in. The financial performance of the manufacturing facility is not as strong as possible, which could cause problems in a downturn.

These second-order effects are clearly undesirable, and are clearly best considered up front. If they were considered upfront, maybe we would have decided to launch the yield improvement effort now, despite the short-term (first-order) difficulties.

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My main learning from this line of thinking is the power of doing the second (and third) order thinking UPFRONT. This approach helps us more completely understand the range of possibilities, and longer-term impacts will naturally be given more consideration. This will enable more holistic and effective decision making, which can only help our efforts building great processes.

[For further reading, an excellent Farnam Street article on second order thinking is at: https://fs.blog/2016/04/second-order-thinking/]

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CHALLENGE TO READERS

Look back at your key decisions and efforts building strong manufacturing processes over the past 5 years…

• What second order effects were the most important and surprising?

• Can the consideration of second and third order effects be made routine via your Project Initiation efforts? This will help systemize your best practices moving forward.

I’d like to hear your thoughts about these higher order effects, and how they impact things in the real world. Call me (508-410-8081) and let’s discuss doing great process work.

If you send us an email, we will get back to you promptly, thanks.

All the Best,

Marty

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